The power of customer experience in driving returns and organisational growth in insurance
By Irvinder Ray, Executive Director, Risk Advisory, Deloitte India and Guneet Vijan, Director, Risk Advisory, Deloitte India
In the competitive realm of the insurance industry, the transformative influence of Customer Experience (CX) has become a cornerstone for success. This article delves into the pivotal role that CX plays in propelling Returns on Experience (ROX) and catalysing sustained organisational growth within the insurance sector. As insurers recognise the paramount importance of delivering exceptional customer journeys, the focus on CX has evolved beyond mere transactions to a strategic imperative that shapes customer loyalty, satisfaction, and ultimately, the trajectory of the entire organisation. This exploration aims to unravel how Generative AI can be harnessed in the insurance sector to enhance CX, thereby directly influencing ROX.
Understanding the impact of Customer Experience (CX) in insurance involves embracing Returns on
Experience (ROX), a nuanced perspective distinct from traditional Return on Investment (ROI). While ROI
primarily focuses on financial gains, ROX uniquely measures the value derived from investments in
enhancing overall customer experience. In contrast to ROI’s emphasis on sales and operational efficiency, ROX evaluates qualitative aspects such as Net Promoter Score (NPS), Customer Satisfaction (CSAT), and Customer Effort Score (CES). Recognising that satisfied customers contribute to long-term viability through loyalty and a positive brand image, ROX emerges as a more comprehensive metric tailored to the intricacies of the insurance industry.
Let’s explore how technology, acting as a catalyst, can influence ROX at customer touchpoints both before and after purchasing a policy. The integration of Generative AI-powered bots in the insurance industry heralds a revolutionary transformation in customer experience, directly impacting Returns on Experience (ROX). When it comes to purchasing insurance policies, these AI bots can navigate through complex information, offering tailored recommendations based on individual needs, preferences, and risk profiles. For example, a customer having a family history of critical illness should be steered more towards buying additional riders for any emergencies in the future.
This personalised approach caters to customers, specific needs, offering financial assistance aligned with their intent. These bots are not only unbiased but also deliver high value in terms of local language support or being multi-lingual in a single conversation. The result is a streamlined and efficient process that not only simplifies policy selection but also enhances the overall customer experience. This heightened engagement significantly impacts ROX, with customers valuing the convenience and personalised attention from generative AI, ultimately fostering a lasting impact.
In the dynamic landscape of insurance, selling a policy is merely half the equation; the true endeavor
lies in crafting enduring customer experiences. In the realm of insurance policy servicing, conversational
chatbots and voice bots emerge as invaluable tools, seamlessly aligning with the transformative potential of technology to enhance the overall customer experience. Many companies have erred in deploying these technologies. Conversations are tricky, especially in the Indian context where the essence of the problem is not rightly addressed by the bots. The companies who tried to jump onto the bandwagon of tech trends neglected integrating models with their proprietary data sets or capitalise on location-specific data nuances. Understanding the intent is the simplest piece of the puzzle but contextualising it and holding and referring to the context completes the puzzle.
Whether customers have queries about their policy details, need to update information, or seek guidance on the claims process, conversational chatbots, and voice bots offer a user-friendly interface for efficient and
immediate resolution. As a result, these technologies play a pivotal role in elevating ROX, delivering
efficient policy servicing experiences that reflect a commitment to customer-centricity in the insurance
industry. Now, these interactions can be further analysed to provide actionable business insights related to
customer experience, sentiment, and core issues – be it process, people, or technology.
These advanced systems automatically categorise unstructured data, facilitating root cause analysis. In scenarios like claims processing or customer support, AI adeptly groups similar issues, providing insurers with a comprehensive overview. This capability allows for quick problem identification, prioritisation, and
enhanced operational efficiency. Meticulous root cause examinations empower insurers to implement
targeted improvements, refining their insurance offerings for increased efficiency and customer
satisfaction.
A seamless and positive CX, spanning the entire customer journey from policy acquisition to claims processing, is pivotal in fostering customer satisfaction and loyalty. Satisfied customers, who have had a positive experience, are more likely to renew policies, purchase additional coverage, and become advocates for the insurance provider. This loyalty directly translates into increased policy retention, thereby contributing to a stable and growing customer base. Furthermore, by strategically measuring and optimising ROX metrics, insurers gain valuable insights into customer preferences, needs, and pain points. These insights are invaluable for refining products and services and tailoring them to meet evolving customer expectations. As insurers align their strategies with a customer-centric approach and prioritise ROX, they not only bolster their reputation but also set the stage for sustainable organisational growth in an ever-competitive insurance landscape.
The insurance industry’s shift towards prioritising Customer Experience is not merely a trend but a strategic imperative for sustained success. By measuring and optimising Return on Experience metrics, insurers can quantify the impact of their CX initiatives. This heightened brand loyalty, forged through a commitment to customer-centricity, becomes a powerful driver of sustained revenue growth. By consistently delivering superior CX, insurance companies not only elevate their brand reputation but also lay the foundation for enduring customer relationships that translate into increased sales and revenue over the long term.
